KUALA LUMPUR: Bank Negara Malaysia’s Monetary Policy Committee (MPC) kept the overnight policy rate (OPR) unchanged at 3% during its meeting on Thursday.
The move met market expectations as a Reuters poll of economists showed all 27 economists had projected the central bank would leave the benchmark interest rate unchanged.“At the current OPR level, the monetary policy stance remains supportive of the economy and is consistent with the current assessment of the inflation and growth prospects,” the central bank said in a statement.
Bank Negara said the global economy continues to expand, driven by resilient domestic demand supported by strong labour market conditions.Global growth, however, remains weighed down by persistently elevated core inflation and higher interest rates. Global trade is also affected by rotation of spending from goods to services, and the ongoing electrical and electronics downcycle. The slower-than-expected growth in China also weighed on the global economy.
“For most central banks, the monetary policy stance is likely to remain tight. The growth outlook remains subject to downside risks, mainly from a slower momentum in major economies, higher-than-anticipated inflation outturns, an escalation of geopolitical tensions, and a sharp tightening in financial market conditions,” Bank Negara said.
“Moving forward, growth will continue to be driven by resilient domestic expenditure amid the challenging external environment. Continued employment and wage growth, particularly in the domestic-oriented sectors, remain supportive of household spending,” it said.Meanwhile, tourist arrivals and spending are expected to improve further.
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